Nanotech - The Circuits Blog

Rambus has asked the International Trade Commission to terminate an investigation of Nvidia relating to four patents as part of a November 2008 complaint.

Rambus provides high-speed memory interface technology, though in recent years the company has become better-known for intellectual property litigation practices. Rambus has sued many of the world's largest chip manufacturers.

Nvidia's David Shannon

(Credit: Nvidia)

The Los Altos, Calif.-based company conceded before the ITC that Nvidia products do not infringe on its four patents, and also asked for termination of several claims from a fifth patent in the ITC action, according to an Nvidia statement.

"We are pleased Rambus has recognized the weakness of these patents and claims," said David Shannon, Nvidia executive vice president and general counsel in a statement. "These withdrawals represent essentially half of the patents and one third of the claims asserted against us, and we look forward to addressing the remainder of the case."

The current ITC litigation originally included nine patents involving memory controllers related to graphics processors.

In June, Nvidia announced that the U.S. Patent and Trademark Office had rejected 41 claims, in seven patents, which Rambus had asserted in the ITC action against NVIDIA.

Rambus has a checkered track record on lawsuits. The European Commission launched antitrust investigations against Rambus in 2007, alleging intentional deceptive conduct in the context of the standard-setting process, citing its behavior as "patent ambush."

In January, a Delaware federal judge ruled that Rambus could not enforce patents against Micron Technology. Judge Sue L. Robinson, in the U.S. District Court in Delaware, ruled on January 9 that evidence "spoliation" occurred when Rambus allegedly destroyed important information related to the case that could be used against it. Robinson's decision rendered Rambus' patents unenforceable.

Qualcomm and Broadcom announced Sunday that they have agreed to end patent litigation between the companies worldwide, with Qualcomm paying Broadcom $891 million, according to the announcement.

On Wednesday, Qualcomm delayed its second-quarter earnings statement, citing advanced settlement discussions with Broadcom.

Qualcomm made this statement Sunday: "Qualcomm and Broadcom today announced that they have entered into a settlement and multi-year patent agreement. The agreement will result in the dismissal with prejudice of all litigation between the companies, including all patent infringement claims in the International Trade Commission and U.S. District Court in Santa Ana, as well as the withdrawal by Broadcom of its complaints to the European Commission and the Korea Fair Trade Commission."

Qualcomm will pay Broadcom $891 million over a four-year period, according to the San Diego-based company. The terms of the agreement will not result in any change to Qualcomm's 3G (CDMA2000, WCDMA, and TD-SCDMA technologies) and 4G (LTE and WiMAX technologies) licensing revenue model, Qualcomm said.

The agreement stipulates, among other things, that Broadcom and Qualcomm agree not to assert patents against each other for their respective integrated circuit products and certain other products and services and Broadcom agrees not to assert its patents against Qualcomm's customers for Qualcomm's integrated circuit products incorporated into cellular products.

"We believe that this resolution is positive for both Qualcomm and Broadcom, our customers, our partners and the overall industry," Paul E. Jacobs, chairman and CEO of Qualcomm, and Scott A. McGregor, president and CEO of Broadcom, said in a joint statement.

"The settlement will allow us to direct our full attention and resources to continuing to innovate, improving our competitive position in this economic downturn, and growing demand for wireless products and services," Jacobs said.

The agreement ends longstanding litigation between the companies. For its part, Broadcom had argued in one case that Qualcomm was unfairly limiting competition by putting onerous conditions in its patent licensing agreements. Qualcomm licensed its chipset patents to other chip suppliers with the stipulation that they must limit sales of their products to mobile handset makers that also have Qualcomm patent licenses.

Broadcom had also asserted that the cloud of litigation hanging over it was a sticking point for prospective customers--and did win a judgment against Qualcomm in 2007. Qualcomm, however, had won court rulings of its own, having suits against it dismissed.

Updated on March 27 at 8:15 a.m. PST with comments from analyst.

On Thursday, Nvidia announced that it filed a countersuit against Intel in response to a filing by Intel last month alleging that a chipset license agreement does not extend to Intel's future-generation processors.

The action also seeks to terminate Intel's license to Nvidia's patent portfolio.

Last month, Intel alleged in a lawsuit that the 4-year-old chipset license agreement with Nvidia does not extend to Intel's future-generation processors with "integrated" memory controllers, such as its Nehalem processor.

"Nvidia did not initiate this legal dispute," said Jen-Hsun Huang, president and CEO of Nvidia, in a statement. "But we must defend ourselves...Intel's actions are intended to block us from making use of the very license rights that they agreed to provide."

Nvidia entered into the now-disputed agreement in 2004. In return, Intel took a license to Nvidia's portfolio of 3D, GPU, and other computing patents, according to the Santa Clara, Calif.-based graphics chipmaker. Nvidia said it had been attempting for more than a year to resolve the disagreement with Intel.

Nvidia said last month that Intel is claiming that the cross-license agreement doesn't apply to future bus interfaces, specifically the interface Intel uses to link the Nehalem processor to the system's memory, a new Intel feature.

Nvidia believes that the PC has become a GPU-based platform as much as a CPU-based platform and that Intel is trying to delay that inevitable shift by using the courts. (CPU stands for central processing unit; GPU stands for graphics processing unit.)

In a research note Friday Doug Freedman of Broadpoint AmTech said: "We are not surprised by NVDA's (Nvidia's) counter-suit against INTC (Intel) over chipset licensing of Nehalem's front side bus (FSB). We believe Intel's intent is not to prevent NVDA from using Nehalem FSB, but to use litigation as leverage for obtaining necessary IP/cooperation from NVDA (even possibly seeking IP in support of its non-PC SoC initiatives)." (IP stands for intellectual property; SoC stands for system-on-a-chip.)

Updated at 10:45 p.m. PST with additional information about Intellectual Ventures

Intellectual Ventures has acquired the patent portfolio of Transmeta, an erstwhile supplier of low-power Intel-compatible x86 processors.

Intellectual Venture Funding, an affiliate of Intellectual Ventures, has picked up 140 U.S. patents and additional pending patent applications owned by Transmeta, which was acquired by privately held Novafora in November of last year.

The Transmeta technology will be used "through two distinct routes," according to an Intellectual Ventures' statement. Novafora will improve its own proprietary designs by using some of the technologies invented by Transmeta. And Intellectual Ventures will provide other companies with access to Transmeta's former patent rights under non-exclusive licensing terms.

The portfolio contains many patents issued in the last few years and has generated, in total, approximately $300 million in revenue, the firm said.

Transmeta's claim to fame as a low-power x86-compatible chip supplier was transitory, and in 2007, about seven years after the company formed, it restructured and ceased being a chipmaker. It reorganized as a Rambus-like IP (intellectual property) company that sues other companies for patent infringement. Transmeta's technology is centered on "code morphing" techniques and very long instruction word (VLIW) design architecture.

"These (patent) additions cover inventions in high-performance, low-power, and embedded processors," Paul Reidy, vice president of semiconductor licensing at Intellectual Ventures, said in a statement.

Intellectual Ventures was founded by Nathan Myhrvold after he retired from his position as chief strategist and chief technology officer of Microsoft.

Updated at 6:15 p.m. PST with AMD statement about a letter it received from Intel on January 20.

Advanced Micro Devices on Thursday reported a bigger-than-expected net loss of $1.4 billion for the fourth quarter of 2008. This is the chipmaker's ninth consecutive quarterly loss.

AMD also disclosed that it received a letter from Intel regarding the two companies' patent cross-licensing agreement.

The $1.42 billion loss, or $2.34 per share, was below the $1.77 billion loss, or $3.06 per share, reported a year ago but worse than Wall Street analysts had expected

Excluding one-time charges, AMD lost 69 cents per share, larger than the loss of 54 cents per share predicted by analysts.

AMD, like Intel and TSMC, has seen a precipitous drop in orders from customers.

Fourth-quarter 2008 revenue came in at $1.162 billion, down 35 percent compared to the third quarter of 2008 and 33 percent compared with the fourth quarter of 2007. Fourth-quarter 2008 revenue was down 28 percent sequentially, excluding third-quarter 2008 process technology license revenue of $191 million, AMD said.

For the year ended December 27, 2008, AMD had revenue of $5.808 billion, while the fiscal 2008 net loss was $3.098 billion. This compares with revenue of $5.858 billion and a net loss of $3.379 billion for fiscal 2007.

AMD provided little future guidance. "In light of the current macroeconomic conditions, very limited visibility and continued corrections in the supply chain, AMD expects first quarter 2009 revenue to decrease from the fourth quarter 2008."

Chief financial officer Bob Rivet said during the earnings conference call Thursday that "factory utilization will be crummy, considering the demand environment." This sentiment echoes what Intel said last week about abysmal factory utilization due to sinking demand from customers. And clear evidence of this trend was provided Wednesday when Intel said it would close five plants.

AMD had warned in December that fourth-quarter revenue would be significantly lower than previously expected.

AMD's stock has been trading around $2 and has lost more than 50 percent of its value since the end of September when the stock was trading above $5.

AMD receives letter from Intel

AMD also disclosed on Thrusday in an 8-K filing with the Securities and Exchange Commission that it received a letter from Intel relating to the patent cross license agreement between the two companies. The agreement covers the x86 instruction set architecture that the companies use in their processors.

An excerpt from the AMD statement in the 8-K filing is as follows: "On January 20, 2009 the Company received a letter from Intel Corporation relating to the 1976 and 2001 Patent Cross License Agreement between the Company and Intel (the 'Cross-Licenses'). In the letter, Intel requests a meeting with the Company to discuss whether The Foundry Company qualifies as a licensed 'Subsidiary' under the Cross-Licenses, whether the creation of The Foundry Company is a breach of the provisions of one of the Cross-Licenses and whether either the transaction establishing The Foundry Company or the Company's 2006 acquisition of ATI constituted a change of control of the Company under the Cross-Licenses."

The Foundry Company is the chip manufacturing operation that AMD is in the process of spinning off.

AMD said it "strongly believes that The Foundry Company qualifies as a 'Subsidiary' under the Cross-Licenses, that the creation of The Foundry Company is not a breach of the provisions of either of the Cross-Licenses and that neither the transaction establishing The Foundry Company nor the Company's acquisition of ATI constituted a change of control of the Company under the Cross-Licenses."

Spansion and Kodak slammed Samsung with two separate patent infringement lawsuits Monday.

Spansion, one of the world's largest suppliers of flash memory chips, on Monday announced it has filed two patent infringement complaints against Samsung with the International Trade Commission and in the U.S. District Court in Delaware.

Spansion is seeking the exclusion from the U.S. market of more than 100 million MP3 players, cell phones, digital cameras, and other consumer electronics devices containing Samsung's allegedly infringing flash memory components.

The complaint also seeks an injunction and treble damages for alleged patent violations relating to Samsung flash memory that Spansion says has accounted for more than $30 billion in Samsung's global revenues since 2003.

Flash memory is found in virtually all electronic devices and is one of the largest segments of the semiconductor industry, with nearly $130 billion in total revenues since 2000.

The Spansion patents named in the lawsuits are fundamental to floating gate technology, "which is the foundation for approximately 90 percent of the flash memory market," according to Spansion.

The chipmaker is also targeting MirrorBit, a "charge-trapping technology" that represents a growing share of the flash memory market and is expected to replace floating gate technology in the future. Flash memory companies including Samsung have publicly announced their plans to transition to charge-trapping type technologies for their future generation products, according to Spansion.

The acquisition of Saifun appears to be one of the driving forces behind these lawsuits. "The acquisition of Saifun Semiconductor earlier this year expanded Spansion's IP portfolio and was a key milestone in Spansion's strategy to create a major licensing business, and generate new streams of significant revenue with very high margins," the company said.

Spansion also listed the "manufacturers of downstream products" containing Samsung's infringing devices in its ITC complaint. Companies named in the ITC case include: Samsung, Apple, Asus, Kingston, Lenovo, PNY, RIM, Sony, Sony-Ericsson, and Transcend.

The Kodak actions allege that both Samsung and LG camera phones infringe Kodak digital camera patents. The patents in question cover technology related to image capture, compression, and data storage and a method for previewing motion images, Kodak said.

Kodak on Monday filed suit against Samsung and LG in the United States District Court for the Western District of New York, as well as in the U.S. International Trade Commission.

Kodak's District Court complaints request compensation for damages resulting from the companies' infringement, and both the District Court and ITC actions seek injunctions prohibiting Samsung and LG from further importation and sale of products cited in the complaints. Kodak did not disclose the amount of damages it is pursuing.

Kodak has licensed its imaging patents to several leading technology companies including: MEI/Panasonic, Motorola, Nokia, Olympus, Sanyo, Sharp, Sony, Sony Ericsson, and others.

Update on October 9 at 9:00 a.m. with additional comments from Intel and AMD.

Advanced Micro Device's new manufacturing venture may come with some old baggage.

After AMD announced on Tuesday that it would spin off its manufacturing assets to a new company partially owned by the Abu Dhabi government, Intel was quick to warn AMD about patent and cross-licensing concerns.

AMD will own part of the new manufacturing entity, for the time being to be called The Foundry Company, while Advanced Technology Investment Co. (ATIC) will own the rest (55.6 percent) and have equal voting rights with AMD in The Foundry Company. The total investment is expected to come to approximately $8 billion.

Intel-AMD disputes are certainly not new. AMD sued Intel in 2005 alleging antitrust violations. But this time Intel has AMD in its sights.

At the moment, Intel is simply expressing concern about the deal, per the Patent Cross License Agreement between the two companies. (The two chipmakers have cross-licensing agreements that go back to 1976.)

The Agreement, which was signed in 2001 and expires in 2010, has restrictions related to the transfer of licenses and patents.

"We don't know enough yet. We have a lot of questions about how this deal is structured," said Intel spokesman Chuck Mulloy.

"According to the public statements they made in their press releases, they (ATIC) also have 50 percent voting rights. So we need to understand a lot more about it. We just have to do due diligence. Make sure that our IP (intellectual property) rights are protected."

AMD, for its part, believes the transaction is structured in a way that doesn't violate any agreements. "We are completely confident the structure of this transaction takes into account our cross-license agreements. Rest assured, we plan to continue respecting Intel's intellectual property rights, just as we expect them to respect ours," said AMD spokesman Drew Prairie.

Transmeta's chips are on the block. The former supplier of low-power Intel-compatible processors said Wednesday that it is actively seeking a buyer, and also announced two agreements with Intel.

The Santa Clara, Calif.-based company, which has remade itself into a supplier of chip-related intellectual property, said that after exploring a range of "strategic alternatives" over the past few months and after strengthening its balance sheet, it will seek a sale as a way to "enhance value for all its stockholders."

Transmeta is working with financial adviser Piper Jaffray.

Back in February, Transmeta weighed an unsolicited offer from Riley Investment Management, which the company ultimately rejected. At that time, Riley claimed Transmeta had an unconvincing business strategy based on its LongRun2 technology--described by Transmeta as a suite of technologies for advanced power management and "leakage control." Riley claimed at the time that there was no "credible evidence" that shareholders would benefit from the LongRun2-related operating expenses.

Transmeta also announced Wednesday that it had entered into two agreements with Intel relating to the licensing of Transmeta technologies and intellectual property. The first agreement is a fully paid-up, nonexclusive technology licensing agreement that provides for the company to deliver "proprietary Transmeta computing technologies" to Intel and grants to Intel a nonexclusive license to use them.

The second agreement is an amendment to a previously announced settlement that Transmeta and Intel entered into on December 31, 2007, which granted Intel a perpetual nonexclusive license to all Transmeta patents and patent applications, including any patent rights later acquired by Transmeta before December 31, 2017.

That settlement provided for Intel to make five annual future payments to Transmeta of $20 million per year for each year from 2009 through 2013. "This amendment accelerates Intel's remaining future payment obligations under the settlement agreement," Transmeta said.

As a result, Transmeta expects to receive cash payments from Intel totaling $91.5 million before the end of Transmeta's current fiscal quarter ending September 30, the company said.

Transmeta, the erstwhile x86 chip competitor, is coming under attack from shareholders.

Transmeta's Crusoe processor once powered NEC, Sony subnotebooks.

(Credit: Transmeta)

The fact that the company posted revenue of only $44,000 in the third quarter, "which included $43,000 of services revenue and $1,000 of license revenue for royalty payments" may or may not have anything to do with Friday's proposed buyout by Riley Investment Management, which owns over 6 percent of Transmeta shares.

The investment firm does have serious questions about the business model based on the LongRun2 technology--described by Transmeta as a suite of technologies for advanced power management and "leakage control" in processors, among other technologies.

Riley complains that there is no "credible evidence" that shareholders will benefit from the LongRun2-related operating expenses. In an EETimes.com article, Riley also rails against an "illegal and unconscionable bonus of over $10 million" paid to Transmeta's general counsel, "simply for doing his job and settling an intellectual property lawsuit against Intel 10 months after it was filed" and claims that grants to top executives were given "at great cost to the shareholders with no commensurate value creation."

A little history: Transmeta, founded in 1995, ultimately failed in its bid to build better low-power x86 processors than Intel after consistently posting large annual losses. Not able to compete as a chip supplier, Transmeta in 2005 transformed itself into a supplier of x86 intellectual property.

After this transition, Transmeta filed a lawsuit against Intel alleging that the latter infringed upon 10 of Transmeta's patents, including computer architecture and power efficiency technologies. In October, Transmeta settled with Intel for $250 million. But this is a one-time payment and doesn't change the fact that Transmeta has exhibited unreliable earnings, particularly compared with a company like ARM Holdings--with 10 billion ARM design-based chips shipped to date and revenue of $384 million in the third quarter.

Transmeta's meager Q3 revenue juxtaposed with the handsome payouts to executives is, indeed, a cause for concern.